Cap & Tax

Cap & Tax

When the US looks for the ultimate scientific authority, we turn to the National Academy of Sciences. What is the National Academy of Sciences? The United States National Academy of Sciences (NAS) was founded in 1863 to provide independent and objective advice to our nation on matters relating to science and technology.

Scientists are selected to serve in the Academy based upon their contributions to groundbreaking original research. New members are elected by current NAS member scientists. The NAS is comprised of our top scientists, and they give our society the best and most up to date scientific advice based on sound scientific findings.

Recently, our National Academy of Sciences and the British Royal Society jointly studied climate change and prepared a report. A summary of their finding’s states: “Greenhouse gases can cause climate change, the concentration of greenhouse gases has increased and are still increasing rapidly, and most of the recent change is almost certainly due to emissions of greenhouse gases caused by human activities.” How do we use this information?

One approach has been to try to rally international cooperation. In 2015, representatives of many countries met in Paris, and the Paris Agreement was signed. Countries pledged to lower greenhouse gas emissions. Many nations are failing to meet their early targets of carbon reduction, because it is difficult to do so without harming economic growth.

While some individuals have stated that lowering greenhouse gasses will lead to economic growth and prosperity, this does not appear to be true. If economic growth did indeed occur with stringent carbon reduction, societies would simply jump onboard to improve their economies and improve the environment. Additionally, in international climate negotiations, countries seek “carve outs,” which allow for higher greenhouse emission allowances, due to “special circumstances,” such as poverty, or not having a history of greenhouse gas emissions. In general, countries are very resistant to mandatory greenhouse gas reduction, as they fear economic decline due to carbon restrictions.

Oregon contributes approximately 0.1% of total world carbon emissions. We are at the center of the world’s environmental movement. We should propose and participate in rationale efforts to promote carbon reduction.

“Cap and Tax,” is euphemistically called “cap and trade,” and “cap and invest,” or “clean energy jobs” by some politicians. These politicians would require high carbon producing industries to pay taxes, also called “buying credits,” when their carbon production exceeds a legally established threshold.

Over time, the taxes will increase, to pressure the industries to produce less carbon by technological advances, by less production of the products they produce, or by moving production to other states or countries. Control of carbon emissions by these methods in no way ensures less world carbon production. In fact, these policies will increase world carbon production, especially if carbon intensive industries move their production to states or countries have less restrictive carbon levels.

Carbon taxes take away resources that businesses would otherwise use to modernize technology and lower carbon production. Instead, carbon taxes transfer significant financial resources to government. It is very uncertain that Oregon’s government will efficiently use this extra revenue toward developing carbon-reducing technologies. Oregon’s recent government involvement in clean energy has been plagued by corruption and did not result in delivering lower carbon emissions as promised.

A better way to reduce emissions can be found in the 2020 UN International Maritime Organization’s sulfur reduction rule. This rule has been put into place to clean large port areas, where the air is commonly heavily polluted due to ships’ greenhouse emissions. The rule, drawn up by government AND industry working together, will ban ships using fuel with a sulfur content of greater than 0.5% (currently fuel sulfur contents at 3.5% are allowed), unless the ship can clean up its own sulfur emissions. Ships that fail to meet standard will be fined and will face insurance-coverage loss, effectively putting them out of business.

It is important to note that this solution to sulfur air pollution was not crafted by government mandate, but by industry and government working together. The use of 0.5% low sulfur fuel is possible as modern maritime engines no longer require high sulfur fuels. Ships can lower their sulfur emissions by using the low sulfur fuel, by scrubbing their sulfur pollution, and by sailing more slowly to improve fuel economy. Will shipping costs rise? Not necessarily. There is competitive tension between shippers and those who provide other means of transporting goods. Both are vying for the same customers on the open market. Those who need shipping, will shop around, looking for the best deals. Market competition keeps prices as low as possible.

This is the model that we should use to improve both our environment and to improve our prosperity. Government and industry, working together to set tough but realistic pollution reduction standards, and then working together to achieve them is a better solution. We cannot achieve our goals if we do not work together.

Additionally, to improve the world’s environment, we must improve global prosperity. Prosperous countries have the resources to further environmental protections, while poor countries do not.

Let us create a prosperous world by using the proven methods of individual and economic freedom and by working together to achieve goals that serve our world well.